In the same Louisiana State Bar Association publication commeorating the 200th Anniversary of our state’s Supreme Court, another milestone observed was the 50 year bar membership of C. Gordon Johnson, Jr. When one considers that Mr. Johnson has practiced law for one-quarter of the time our Supreme Court has deliberated, the enormity of his experience comes into dramatic focus. It is our great honor and our clients’ good fortune to still have him here each day.

Bill Lozes recently led his clients to a jury trial victory in the 21st Judicial District Court (Tangipahoa Parish), achieving the rare distinction of a defense verdict favoring a rear-ending driver.

Two plaintiffs, with a combined $111,000 in medical expenses for extensive treatment, including cervical and lumbar ESIs, multiple branch blocks and discectomies, saw their claims reduced to an emergency room visit and further diminished by 50% on Louisiana’s comparative fault statute (Civi lCode article 2323). General damages of $500 each were also cut in half.

The jury found that both plaintiffs failed to establish causation for complaints treated outside of acute emergency room care. A series of inconsistencies and the fact that all treatment, other than the emergency room, was on attorney referral contributed to a credibility deficit.

In spite of his own credibility issue, the defendant driver’s account of the accident prevailed over the plaintiffs’, aided by an un-impeached guest passenger’s testimony. Both plaintiffs told the jury that their vehicle was rear-ended while stopped for a traffic signal. The defense put on evidence, including the plaintiffs’ own inadvertent admission, that the lead vehicle proceeded into a left-hand turn, protected by a green arrow, then suddenly braked for no apparent reason. The defendant driver’s credibility was compromised when he denied a conviction for possession of controlled substances. His apparently truthful companion confirmed the defense version. The jury accepted the sudden stop accident description and assigned fault equally between the drivers.

On closing, counsel argued damages of $340,000 for the plaintiff driver and $440,000 for her passenger. Lozes argued a minimum 50% fault against the plaintiff driver and recovery of emergency room expenses only. He generously suggested $500 each for general damages. The jury returned its verdict entirely consistent with Lozes’ closing.

Claims Litigation Managemnt, an insurance industry trade group dedicated to multidisciplinary networking, recently honored Porteous, Hainkel & Johnson managing partner, Adrianne Baumgartner, with a feature profile.

Our own effusive praise for Adrianne’s hard work is amply demonstrated through the trust placed in her as the lead of our management team. Abundant evidence of more universal praise is again on display in the CLM Profile.

The practice of law resists change. A trend toward automation, then computerization, that effectively altered the business model for great swaths of the economy, mostly impacted on the lawyer’s profession only at the margins. Resistance will not survive. Some forward thinking individuals are pulling from the front – the ReInventLaw folks at Michigan State University’s law school come to mind, while practical necessity pushes from the rear. Thus, in two recent ferderal decisions, courts came to terms with new procedures, not as much from a template of judicial design as from one created in Silicon Valley.

EEOC v. The Original Honeybaked Ham Co. of GA 2013 US Dist. LEXIS 26887 (D. Colo. 2/27/2013)

A federal magistrate sanctioned the EEOC for failing to abide by a discovery order seeking production of , among other things, social media communications and any cell phone used to send or receive text messages during the relevant time period for a forensic collection and review. The court further ordered claimants to provide access to any email account, website, or cloud-based storage location that they used to post communications or pictures.

The EEOC was the plaintiff in the lawsuit. After the discovery order was issued, it failed to follow the e-Discovery process. Honey Baked filed a motion for sanctions under FRCP 16(f). The lawsuit involved claims of sexual harrassment by a manager of the defendant against a class of employees. Defendant sought information on each of the employees. The Court explained the need for the broad discovery of social media discovery stating,

. . a file folder titled “Everything About Me,” which [the claimant class members] have voluntarily shared with others. If there are documents in this folder that contain information that is relevant or may lead to the discovery of admissible evidence relating to [the] lawsuit, the presumption is that it should be produced. The fact that it exists in cyberspace on an electronic device is a logistical and, perhaps, financial problem, but not a circumstance that removes the information from accessibility by a party opponent in litigation.1

The EEOC objected on several grounds, one of which was privacy. The court singled out the privacy objection noting, “There is a strong argument that storing such information on Facebook and making it accessible to others presents an even stronger case for production, at least as it concerns any privacy objection. It was the claimants (or at least some of them) who, by their own volition, created relevant communications and shared them with others”

This case marks yet another instance of a court allowing broad parameters on the discovery of social media. It is also the first in which a court awarded sanctions under FRCP 16(f)(1) rather than the traditional FRCP 37.

Federal Trade Commission v. PCCare247 Inc, U.S. District Court, Southern District of New York, No. 12-07189:

The court allowed lawyers for the US Government to serve legal documents on a group of defendants in India via Facebook. This came after a showing by the US Government that, “ample reason for confidence that the Facebook accounts identified are actually operated by defendants.” US District Judge Paul Engelmayer noted that service by Facebook is a “relatively new concept” but urged courts to be open to new technologies “rather than dismissing them out of hand.”

Both cases show the fast pace at which the law is being made to keep up with technology. Social media cannot be ignored in litigation and as Courts embrace the use of this new technology, the penalties for doing so are likely to become more severe.

But, more fundamentally, lawyers and judges no longer command control of an evolutionary process. They are part of, or may become victims to, sudden tectonic shifts.

The Louisiana Second Circuit recently held in Bernard v. Ellis, 2011-2377 (La. 07/02/12), ___So.3d ___, 2012 LEXIS 1956, where it held that permissive passengers of a vehicle are liability insureds and, therefore entitled to UM coverage under Imperial’s policy.

Plaintiffs continued to assert that they were entitled to an award of penalties and attorney’s fees as the July 2009 amendment to La. R.S. 22:1282 strips Imperial of any good faith argument for its refusal to pay. The amendment to La. R.S. 22:1282 took effect after the accident in Bernard, but three months before the accident in Daniels. The amended version provides:

No motor vehicle liability insurance policy nor any uninsured motorist coverage for bodily injury shall limit the coverage of, or the amount that can be recovered by, the named insured, or the spouse or other family member of the named insured, or express or implied permissive users, for whom the policy provides coverage, to any amount less that the highest policy limit provided in the policy for the respective coverage or potential recovery. (Emphasis added).

The amendment to La. R.S. 22:1282 added the words “or express or implied permissive users.” However, the immediately following language “for whom the policy provides coverage” raised an issue as to whether the plaintiff’s under Imperial’s policy would be covered considering the policy language specifically narrowing the class of insureds. The appellate court reasoned that had the Supreme Court held that plaintiffs, as passengers, were not users of the vehicle, then arguably the language of La. R.S. 22:1282 would not have applied, because the plaintiffs would not have been statutorily or contractually entitled to coverage. Therefore the refusal to grant penalties and attorneys fees was proper. Daniels, 2013 La. App. Lexis 38, *5.

Plaintiff counsel love it. Defendants cringe. “It goes to the weight,” punts the court on a difficult question of scientific credibility.

The Daubert standard, set down twenty years ago, may be the dimmest bright line rule in a defendants list of arguments. We’re not here to cast aspersions where the difference between praise and criticism is merely a matter of perspective. But we will applaud the court that gets it right. And so it is for Judge Martin Coady in St. Tammany’s 22nd Judicial District Court. Judge Coady recently granted our own Adrianne Baumgartner’s Motion to Strike expert testimony for failure to satisfy the Daubert standard.

The issue was a rheumatologist’s proffered testimony supporting allegations that a motor vehicle accident caused or exacerabated a plaintiff’s rheumatoid arthritis. In his written reasons, Judge Coady explains that self-referrential “experience” is not a substitute for scientific concurrence or the appropriate standard on burden of proof. Reports of “having seen” patients whose condition worsened after an accident, does not satisfy the exacting Daubert standard.

See, McKinzie v. McConnell, (22nd JDC, St. Tammany Parish, #2010-17381).

In Katrina’s last gasp, we reported on the continuing trend narrowing insurers’ flexibility in matters of statutory bad faith. In the First Circuit opinion, Allstate’s failure to tender payment in a form acceptable to the plaintiff within 30 days of a mediated settlement was judged in bad faith under Louisiana Revised Statute 22:1973. The Supreme Court took another look.

In its opinion, 2012-CA-2181 (La. 12/14/12), the Court reviewed the payment history from another perspective and appears to conclude that the claimant’s (Instant Replay Sports, Inc.) post mediation conduct delayed or tolled the running of Allstate’s 30 day deadline. The First Circuit was reversed and trial court opinion reinstated.

Louisiana’s Supreme Court has been a fair arbiter between competing interests in the long saga of Katrina bad faith. No question, the Court’s standards have been strict from insurer persepctives (see, for example, Oubre v. Louisiana Citizens Fair Plan, but the Court has also pulled back in a couple of important cases where doing nothing might have been the easier course. See Durio v. Horace Mann Ins. Co., in additon to the instant opinion.

Years ago, a client thought my dismissal of her suggestion to make an offer of judgment brazen. Perhaps I could have been more subtle explaining the hurdles to making an offer of judgment effective; when I suggested we not waste our time, I suspect she heard me say “don’t waste my time.” Since then, most have come to see the statute as a dead letter. Any remaining life was recently killed off by the Louisiana Fifth and Third Curcuits.

Implictly adopting the federal position, even though the statutes are worded differently, the two state appellate courts have declared that a defendant’s remedies under the statute are unavailable if the defendant wins on the merits. Only if the plaintiff obtains a judgment, and then, only a judgment that is no more than 75% of the offer, does the defendant recover post-offer costs. See, Carcamo v. Raw Bar, Inc., 12-CA-294 (LaApp 5 Cir. 11/27/12); and Broussard v. Martin OPerating Partnership, 11-1559 (LaApp 3 Cir. 11/28/12).

From the start, the 75% rule forces defendants to overbid a settlement offer before plaintiffs will ever perceive any risk in ignoring an offer of judgment under Louisiana Code of Civil Procedure article 970. Now, if the defendant’s case is too good, the plaintiff is better off losing outright than if he wins a nominal judgment that, even if nothing else, does endorse the basic validity of his complaint.

Meanwhile, the defendant needs to figure out a way to throw the case. Slightly.

The judicial interest rate in Louisiana remains at 4.0 percent for a third consecutive year.

A recent study found that no-pay/no-play statutes reduce the number of uninsured motorists on the road by a modest 1.6 percent.

For more see this article.

Of the insurer duties enumerated in Louisiana Revised Statute 22:1973, failure to fund a settlement within 30 days has not been among the more commonly breached. Thus, when the First Circuit recently delivered its opinion in Instant Replay Sports, Inc. v. Allstate Insurance Company, 2011 CA 1414 (La.App. 1 Cir. 09/05/12), it made an impression. For insurers, the lesson is cautionary.

The facts are simple. Instant Replay Sports, a business in Slidell, LA, insured by Allstate, was damaged during Hurricane Katrina. Suit on Allstate’s commercial policy included property damage and personal injury claims. A mediated settlement concluded after two days with a written agreement signed on September 11, 2009. Critically, the agreement stated that plaintiff would be responsible for satisfying outstanding liens and that payment would be delivered within 30 days.

Disagreements over details of the Allstate drafts delivered in satisfaction of the settlement contributed to final payments not being delivered until November 3, 2009. Plaintiff’s brought bad faith claims against Allstate for failure to tender payment within 30 days of written settlement agreement. Allstate successfully opposed the claim on motion for summary judgment in the trial court. The First Circuit reversed and remanded.

The 4-1 majority opinion held that the written agreement completed on September 11, 2009 triggered Allstate’s 30 day payment obligation. The insurer argued that details of the agreement, in particular, the precise amount of the SBA lien, were unresolved at that time and delayed the payment obligation until 30 days after September 24, 2009.

Had Allstate prevailed on the triggering event, they may or may not have still breached their duty. The question was rendered moot when the First Circuit agreed with plaintiff that September 11 was the correct written settlement agreement date.

Judge McClendon, writing for the majority, based the decision on two primary considerations. First, the settlement agreement executed on September 11 declared that “all liens … will be paid by the plaintiff(s), including but not limited to all requirements under the law to satisfy the lien or rights of the [SBA].” In short, their agreement severed the SBA lien from considerations relevant to form and timing of payment. Second, the agreement itself declared that payment would be delivered “within 30 days.”

The First Circuit concluded that the trial court not only erred in granting summary judgment in favor of Allstate, but that Allstate was, as a matter of law, in breach of its 22:1973(B)(2) duty. Plaintiff’s bad faith claim was remanded to the trial court for assessment of a penalty.

See: Instant Relay Sports, Inc. v. Allstate.

Porteous, Hainkel & Johnson proudly supports the efforts of Claims Litigation Management in its mission to promote and further “the highest standards of claims and litigation management.” To that end, we are a sponsor of the 2012 Insurance Bad Faith and Coverage Conference. Our managing partner, Adrianne Baumgartner, joined by two colleagues, will present a course on Selection and Preparation of 30 (b) (6) Witness and Company Fact Witness – One Size Does Not Fit All at this prestigious Boston, MA event.

Kathleen Simon and Eric Johnson recently partnered successfully at trial in defense of a traumatic brain injury claim. Plaintiff intended to put on evidence of a $17 million life-care plan through the testimony of Dr. Cornelius Gorman. Supporting neuropsychology testimony was presented through Dr. Roberta Bell.

The claim arose from a July 2005 motor vehicle accident in Lafayette Parish. Although the primary policy provided $100,000 coverage and there was no assurance that any more than an additional $20,000 might ever be available, all defendants proceeded to trial on the strength of substantial impeachment evidence. Ultimately, an evidentiary struggle resolved in the defendants’ favor when the trial court refused to allow Dr. Gorman’s testimony on the life care plan. The firm’s client settled for payment of 50% of its policy.

A subsequent jury verdict assessed uncollectible damages of $150,000, with only an excess insurer sitting on top of $1,120,000 underlying coverage left in the case. Defense experts, including Dr. Megan Ciota, successfully rebutted much of the plaintiff’s evidence. The jury award may have been much lower had the defense need to suggest a lesser amount still prevailed at the time of closing arguments.

Isaac drifted across southeast Louisiana leaving several communities under water, some worse than after Katrina. Isaac failed to strengthen enough to cause large scale wind damages. As such we expect relatively few wind claims over deductible.

That, however, is only partial relief for the weary insurer. Louisiana revised statute 22:1337, effective June 25, 2009, mandates that only a single hurricane deductible may be assessed per year. Although Isaac’s wind damage may be light, many insureds will have some provable loss that will apply toward the total deductible in the event of a second storm before season’s end.

The issue was recently discussed in the New Orleans Times-Picayune article available at the following link:

Hurricane Isaac will introduce many New Orleans homeowners to wind deductibles

§ 22:1337. Homeowners’ insurance deductibles applied to named-storms, hurricanes, and wind and hail deductibles

A. For purposes of this Section, the following definitions shall apply:

(1) “Hurricane” means a storm system that has been declared a hurricane by the National Hurricane Center of the National Weather Service.

(2) “Named storm” means a storm system that has been declared a named storm by the National Hurricane Center of the National Weather Service.

(3) “Separate deductible” means a deductible that applies to damage incurred during a specified weather event and may be expressed as a percentage of the insured value of the property or as a specific dollar amount and includes hurricane, named-storm, and wind and hail deductibles.

B. For all homeowners’ insurance policies or other policies insuring a one- or two-family owner occupied premises for fire and allied lines, issued or renewed by authorized insurers on or after January 1, 2010, any separate deductible that applies in place of any other deductible to loss or damage resulting from a named storm or hurricane shall be applied on an annual basis to all named-storm or hurricane losses that are subject to the separate deductible during the calendar year.

C. If an insured incurs named-storm or hurricane losses from more than one named storm or hurricane during a calendar year that are subject to the separate deductible referred to in Subsection B of this Section, the insurer may apply a deductible to the succeeding named storms or hurricanes that is equal to the remaining amount of the separate deductible, or the amount of the deductible that applies to all perils other than a named storm or hurricane, whichever is greater. Insurers may require policyholders to maintain receipts or other records of such losses in order to apply such losses to subsequent named-storm or hurricane claims.

Prescription on a stacked UM claim is not tolled by the pendency of claim against the primary UM insurer. Porteous, Hainkel & Johnson partner Ryan Acomb secured that just relief from Louisiana’s Fourth Circuit Court of Appeal.

Plaintiff was a guest passenger. Her host was involved in a motor vehicle accident caused by the negligence of another driver on October 4, 2002. After settling with the at-fault driver in 2004, plaintiff dismissed her own UM insurer in 2005 without prejudice. She preserved her UM claim against the insurer of the host vehicle. She brought her carrier back into the litigation in 2010. Policy limits were previously paid pursuant to the liability and primary UM coverages.

Louisiana law generally makes coverage on a vehicle primary to separate personal coverage. In the UM context, stacking rules permit a UM claim by a passenger against a single personal policy if coverage on her host vehicle does not fully compensate for all damages.

The courts have also found a shared interest between UM insurer and torfeasor. Prescription is interrupted against one by suit against the other under the Code of Civil Procedure. The Fourth Circuit concludes that a common obligation does not exist between stackable UM policies. This result is consistent with the same concept applied to liability and UM insurers.

The trial court sustained Mr. Acomb’s prescription exception. The Fourth Circuit affirmed in an opinion rendered May 23, 2012. A copy of the opinion may be viewed at the link below.

Clotworthy v. Scaglione

Louisiana Civil Code article 2315 recognizes a cause of action favoring spouses for loss of consortium. Typically, the claim is limited to loss derivative of injury occurring during the marriage. Louisiana’s Second Circuit Court of Appeal has allowed one narrow exception where the tort occurs pre-marriage, but the injury does not become manifest until after. Aldredge v. Whitney, 591 So.2d 1201 (La.App. 2 Cir. 1991). The same court later narrowly confined the Aldredge exception to its facts. Herndon v. Southwestern Electric Power Co., 26,869 (La.App. 2 Cir. 5/10/95), 655 So.2d 678.

From time to time, it is asked when service under the long-arm statute is “perfected.” I take the position that long-arm service is never perfected unless and until the affidavit of service is filed. Thus, unless you are prepared to waive service, an answer should never be filed before the affidavit.

Whether I am technically correct or not, Louisiana Revised Statute 13:3205 makes it clear that a default judgment may not be entered less than 30 days after the affidavit is filed.

That the requirement of R.S. 13:3205 is mandatory was recently affirmed by the First Circuit in Downey v. Downey, 2010-1853 (La.App. 1 Cir. 2/11/11).

As for a trial judgment, the normal rule is that issue must be joined before a judgment may be entered. On that point, however, there are exceptions where a party makes a general appearance by other means, but that is a discussion for another day.

West’s Louisiana Statutes Annotated Currentness
Louisiana Revised Statutes
Title 13. Courts and Judicial Procedure (Refs & Annos)
Chapter 11. Jurisdiction and Venue (Refs & Annos)
Part I. Jurisdiction (Refs & Annos)
§ 3205. Default judgment; hearings; proof of service of process

No default judgment can be rendered against the defendant and no hearing may be held on a contradictory motion, rule to show cause, or other summary proceeding, except for actions pursuant to R.S. 46:2131 et seq., until thirty days after the filing in the record of the affidavit of the individual who either:

(1) Mailed the process to the defendant, showing that it was enclosed in an envelope properly addressed to the defendant, with sufficient postage affixed, and the date it was deposited in the United States mail, to which shall be attached the return receipt of the defendant; or

(2) Utilized the services of a commercial courier to make delivery of the process to the defendant, showing the name of the commercial courier, the date, and address at which the process was delivered to the defendant, to which shall be attached the commercial courier’s confirmation of delivery; or

(3) Actually delivered the process to the defendant, showing the date, place, and manner of delivery.

See our firm news section for details on two recent defense judgments secured by James Thompson and Michael Gee. Mr. Thompson prevailed before a St. Charles Parish jury while Mr. Gee persuaded a Federal Judge to take his case out of the hands of an Eastern District Jury on defense judgment as a matter of law.

No premises payday for prosthesis plaintiff

and

Lafourche Parish not liable for inmate suicide

James S. Thompson

Michael G. Gee

Reflecting on his recent trial resulting in another defense judgment, Jim Nieset quizzes: what does this picture have to do with a successful day in court?

Jim will be happy to share the amusing story of his success in Jefferson Parish’s 24th JDC.

Applying precise interpretation of Revised Statute 22:1892 and resolving conflict between the Fifth and Third Circuits at the same time, the Supreme Court ruled in December that failure to timely initiate loss adjustment violates the statute regardless of cause. See, Oubre v. Louisiana Citizens Fair Plan, 20100-0097 (La. 12/16/11).

A nearly $93 million district (trial) court summary judgment was reinstated.

For more information, see this Insurance Journal article. 

The ruling brings initiation of adjustment requirements into line with cases considering a similar question regarding timeliness of payment upon receipt of sufficient proofs of loss. See, Richardson v. Geico Indemnity Company, 2010-0208 (La.App. 1 Cir. 9/10/10), 48 So.3d 307, writ denied, 2010-2473 (La. 12/17/10), 51 So.3d 7.

Judge Knoll further held that proof of actual consequential damage is not required for an award of $5,000 penalties under Revised Statute 22:1973. This portion of the judgment also comports with recent comparable holdings. See, Sultana Corp. v. Jewelers Mut. Ins. Co., 03–0360 (La.12/3/03), 860 So.2d 1112, 1118 (quoting Midland Risk Ins. Co. v. State Farm Mut. Auto. Ins. Co., 93–1611 (La.App. 3 Cir. 9/21/94), 643 So.2d 242).

Louisiana bad faith lines are brighter than ever. Deadlines for initiation of loss adjustment are absolute and 22:1973 penalties are not dependent on proof of consequential damage.

Continuing the theme of our prior post, a Civil District Court judge recently granted summary judgment dismissing plaintiff’s vehicle defect claim against a rental company.

Plaintiff, rear-ended by a rental truck, alleged Civil Code Article 2317 defects based on driver reports of brake failure. The defendant presented affidavits from the prior rental customer affirming that the vehicle worked properly while in his possession and from defendant’s employee responsible for checking the vehicle after the previous return.

Engineering experts agreed the brake failure resulted from hydraulic fluid drained through disconnected brake lines. Evidence showed intentional manual disconnect of the lines. There was no evidence to the contrary.

Glenn B. Adams in the firm’s New Orleans office worked with defendant’s national counsel in securing evidence and presenting the successful motion.

Glenn B. Adams

Insurers fared well in the challenging environment of New Orelans’ Civil District Court through two recent jury verdicts and by motion for summary judgment. Predictions of a more receptive CDC audience may be premature, but our collective experience signals an opportunity to advance more cases to trial. Strong defenses on the facts are being shown some respect.

Jim Thompson put an exclamation point on this series when a CDC jury returned its verdict, assessing general damages of $80,000 on $171,000 total damages for a cervical disc injury and recommended two level fusion. The plaintiff was a credible 42 year old female who presented evidence of future medical expenses up to $200,000. Prior to trial, she had been paid limits under a liability policy and a UM tender of $25,000. The net result was a judgment against her UM insurer for $46,000, compared to a final demand of $215,000.

Jim Nieset earned success for his client when, just down the hall from Mr. Thompson, another court agreed that the plaintiffs could not satisfy their burden to prove that hurricane contents losses were covered under a homeowner’s insurance policy. The plaintiff’s witnesses all admitted that they could not say how various artworks were damaged. Counsel argued that proof of the storm, roof damage and contents loss was enough to ovecome a summary judgment motion. Jim successfully countered that the law requires plaintiff to present evidence sufficient to satisfy his burden of proof at trial. A $300,000 final demand was left unanswered. This was the second claim summarily dismissed by the court in the same lawsuit, giving the insurer a unique bifurcated victory without the need for trial.

Earlier, in a case now past all appeal delays, Chauntis Jenkins came through with a triumphal defense of her client when a CDC jury assigned plaintiff 80% fault for his role in a French Quarter altercation. Her success was a relief to the client, who was found by the same jury to be uninsured for damages caused by his excessive response to the plaintiff’s provocation. What began as a demand for $100,000 became a damage award of $2,000.00 and, after reduction for comparative fault, a personal liability of $400.

All three results serve as reminders that properly presented evidence to a court remains an insurer’s viable defense.

James S. Thompson

James R. Nieset, Jr.

Chauntis T. Jenkins

and leaves as a member of the Claims Litigation Management Alliance’s first Litigation Management Institute graduating class.

Press Release

Congratulations Ryan!

A district attorney in south-central Louisiana once declared that insurance fraud does not exist in his Parish. Obviously, that DA’s cooperation won’t soon be needed. Recently, Mike Gee proved that everywhere else, part of managing a questionable first party property claim is open communication with law enforcement.

Mike recovered payments made to a loss payee as part of an insured’s plea agremeent to fraud charges in Acadia Parish. Results are possible when adjusters and attorneys work cooperatively with authorities begining at the first notice of claim.

In Mike’s case, a vehicle reported stolen was found submerged in a bayou less than one mile from the insured’s home. His effort continues in recovery of expenses, including expert witness fees (mechanical engineer), court costs and legal expenses.

Although not a critical element of this case, insurers need to recall that Louisiana’s bad faith statute contains an exemption from penalties for refusal to pay an insured’s first party property claim as long as an investigation remains open (the exemption does not apply to amounts owed a loss payee). A positive working relationship between adjusters and attorneys on one side and law enforcement on the other may pave the way for keeping an official file open while the insurer examines a questionable claim. Recall that many jurisdictions have limited budgets and little expertise for the kind of inquiry required. More so in a bad economy.

Insurers choosing to examine a questionable claim should consider how their investment might benefit police and prosecutors that would otherwise be unable to respond.

From examinations under oath through trial, attorneys in all four Porteous, Hainkel & Johnson offices are experienced SIU investigators and litigators.

Michael G. Gee

The Louisiana Supreme Court pronounced recently that “damages” are, in fact, “damages.” Thus ends the curious saga of Neal Auction, 2008-0574 (La.App. 4 Cir. 4/29/09), 13 So.3d 1135.

Neal Auction was the first of a small number of cases holding that insurance bad faith penalties under Louisiana Revised Statute 22:1973 (formerly 22:1220) for breach of “a duty of good faith and fair dealing” are calculated based on all amounts awardable at trial. Bad Faith penalties under 22:1973 are two times the amount of “damages.” The “damages” to be multiplied were, according to the Fourth Circuit opinion, all losses, not just the consequential damages recoverable under the statute. No more.

Declares Justice Johnson for the Court, “the only logical reading [of 22:1973] is that the ‘damages sustained‘ in Section (C)”, the penalty provision, “are the same ‘damages sustained as a result of the breach‘ in Section(A). Section (A) makes an insurer liable for consequential damages incurred for specific conduct deemed breaches of duty under the statute’s Section (B).

For example, any conduct described in Section (B) that causes an insured to incur additional loss, whether the loss is covered by the policy or not, exposes the insurer to judgment for that loss as a “damage sustained.” Section(C) adds a penalty of 200 percent.

Consider the following hypothetical: Insured incurs a property damage loss of $200,000. The insurer tenders payment of $100,000, but reasonably disputes that it owes the other $100,000 because of a coverage, valuation, causation or other issue. At trial, the court determines that the other $100,000 was incurred as a result of a covered loss, but agrees that the insurer’s dispute was reasonable. However, the court also determines that the insurer failed to initiate loss adjustment within 14 days. Insured proves that the insurer’s delay caused him emotional distress for which he sought counseling at a cost of $3,000. The insurer may be cast in judgment for the $3,000 counseling fee. The insurer may also be assessed penalties under Section (C). The Neal Auction court held that 2 times the judgment amount ($103,000 X 2 = $206,000) may be added for a judgment total of $309,00. Under Durio the maximum penalty is $6,000.

Never explained by the Fourth Circuit was why it believed that the legislature intended the same word, “damages”, to have two very different meanings in the same statute.

The Supreme Court also held that a cause of action for bad faith arises at the moment of an insurer’s violation of another bad faith statute, Louisiana Revised Statute 22:1892 (formerly 22:658). As a result, an amendment to the statute allowing for an award of attorney fees did not apply to pre-amendment conduct on a continuing breach theory.

Porteous, Hainkel and Johnson attorneys Charles, L. Chassaignac IV and Adrianne Baumgartner assisted in the preparation of an amicus brief on behalf of the National Association of Mutual Insurance Companies.

Click to obtain a pdf copy of the Supreme Court’s opinion: Durio v. Horace Mann Ins. Co., 2011-0084 (La. 10/25/2011)

Adrianne Baumgartner

Charles L. Chassaignac, IV

The Fourth Circuit recently reaffirmed the lack of a wrongful death plaintiff’s right of action for punitive damages under the old Civil Code article 2315.3 relating to the handling, storage and transportation of hazardous materials. The logic, that wrongful death damages are limited to the loss incurred by a decedent’s survivor, appears to apply equally to the currently existing punitive damage statutes.

See, Bailey v. Exxon, 2011-0177 (La.App 4 Cir. 8/31/11)

Conducting recreational quantum analysis, we noticed an appellate point of view that might catch unsuspecting defense practitioners unaware. A stipulation as to the presumed testimony of a chiropractor may be interpreted as an judicial admission of causation. It is not unusual for counsel to stipulate to the authenticity of medical records, reserving the right to contest relevance. Similar attention must be paid to a pre-trial stipulation regarding health care professional testimony in lieu of deposition or live appearance.

It is often predictable what doctors and other providers, in this case a chiropractor, will say about their patients. But, according to the Fifth Circuit in Burse v. Allstate, 00-1895 (La.App. 5 Cir. 3/28/01),783 So.2d 548, a stipulation is a judicial admission of causation. In that case, the trial judge had found, in favor of defendants, that the plaintiff failed to prove injury from a motor vehicle accident. The Fifth Circuit, often deferential to trial courts in these matters, held that the stipulation conclusively established an accident related injury.

This result may be avoided by including language in a stipulation, similar to the usual practice with medical records, that the agreement does not constitute an admission of causation.

For the second time, the U.S. Fifth Circuit refuses to accept a binary interpretation of the state Supreme Court Louisiana Bag, 999 So.2d 1104 (La. 2008), opinion. See, Berk-Cohen Associates, L.L.C v. Landmark American Ins. Co., No. 10-30916 (U.S. 5th Cir.). Following its own recent precedent of allowing for the possibility of good faith disagreement on policy provisions, the court held that an insurer may be wrong without being arbitrary and capricious. See, Seacor Holdings, Inc. v. Commonwealth Ins. Co., 635 F.3d 675 (5th Cir. 2011) about which we previously wrote HERE.

The issue described in this Per Curiam opinion is interesting in its own right. Berk-Cohen owned an apartment complex insured by Landmark Insurance. The owner made a Hurricane Katrina wind damage business interruption claim. Landmark tendered a significant payment, but declined to accept Berk-Cohen’s assessment using post-Katrina increased rents as a measure of lost business opportunity.

Landmark’s policy calculated net-income based on post-loss prevailing business conditions, excluding favorable conditions caused by the covered loss. The Fifth Circuit found that market rental rates were higher post-Katrina because of flood damage to local properties. Because flood was not a “covered loss” under the Landmark policy, the Fifth Circuit held that Landmark could not exclude the difference between pre and post-storm rental rates from its loss calculation.

In spite of its conclusion, the Fifth Circuit also found that Landmark’s attempt to apply its exclusion was not arbitrary or capricious. In distinguishing Louisiana Bag, the court noted Landmark’s substantial compliance with its policy obligations and its not entirely unreasonable defense.

Louisiana adopted a pure comparative fault system in 1996. Prior to that, Louisiana courts followed the common law rule that a tort defendant may not reduce his or her liability based on subsequent negligence of a health care provider rendering related treatment. The Louisiana Supreme Court has held that the rule does not survive comparative fault analysis under the relevant statutory language. A defendant is entitled to put on evidence of negligence against a doctor or other provider for purposes of assigning percentages of fault. See, Dumas v. State of Louisiana, through the Department of Culture Recreation  and Tourism, 2002-0563 (La. 10/15/02),  828 So.2d 530,

In Dumas, the Supreme Court held that the once widely prevailing view did not survive enactment of pure comparative fault. A defendant can put on fault evidence against a non-party health care provider. Civil Code article 2323 guarantees that right without exception.

To the extent that silence is inference, there is no requirement that the defendant go through the medical review panel process and prescription is not a bar to pleading a provider’s fault as an affirmative defense in am an amended answer. In Dumas, the State pled comparative fault of a hospital as an affirmative defense in an amended answer filed five years after the alleged negligence. The Supreme Court apparently was not asked to consider and did not comment on the timing of the defense or the lack of a request for panel review.

Although a defendant could theoretically wait as long as it chooses to assert the fault of a treating health care provider, it would not generally be prudent. Trial courts have discretion to deny leave to amend previously filed answers. Further, with the Court not having commented on possible procedural issues and prescription, it would invite reconsideration if a defendant voluntarily waited until after the prescriptive period on a medical malpractice claim before asserting the affirmative defense. If a defendant learns of a possible malpractice issue as having contributed to or exacerbated a plaintiff’s injuries, the matter should be raised as an affirmative defense as soon as practicably possible given constraints on investigation and the duty to verify allegations made in a pleading.

Dumas – Comparative fault and med mal

Two more Porteous attorneys obtained defense judgments in recent weeks. Former managing partner James Thompson proved, once again, the value of experience shortly before associate Michelle Trowbridge provided object an lesson in the quality of her training.

Mr. Thompson prevailed on behalf of Louisiana Farm Bureau in the same court, the 24th Judicial District in Jefferson Parish, where Ms.Trowbridge soon prevailed on behalf of a State Farm insured, both in disputed laibility cases. Ms. Trowbridge thus becomes a second generation trial victor for the firm in the  fashion of her father, partner Fred Trowbridge, Jr.

Offers of judgment under both state and federal procedure present a technical hazard. Defense counsel may unwittingly offer up their client for bad faith penalties and attorney fees. A hidden danger under FRCP 68 is often avoided under the Louisiana rules because of differences in the statutory language. To avoid the risk in federal court, declare the offer for all amounts at issue in the case, including penalties and attorney fees.

Danger lies in the technical effect of an acceptance. An accepted offer is a judgment in favor of the plaintiff. If the accepted offer referenced only the underlying claim, for example, an offer referencing “damages” only, then the resulting judgment may serve as unintended – perhaps even conclusive – proof necessary for recovery of additional penalties and attorney fees. See FRCP Rule 68 Practice Commentary.

Under Louisiana Code of Civil Procedure article 970 this result is less likely for two reasons. First, the offer must declare whether it is inclusive or exclusive of “costs, interest, attorney fees, and any other amount which may be awarded pursuant to statute or rule.” Thus, to be effective, the offer must affirmatively contemplate bad faith remedies. Second, accepted offers of judgment are often treated as settlements where no judgment is ever filed. Of course, the trap still exists, but it’s not as effectively camouflaged.

Is there a potential downside to the proposed federal solution? Might the defendant have admitted bad faith by offering penalties and attorney fees? Although there would be no increased exposure, the judgment itself could be an unwelcome irritant. Perhaps an additional declaration that  the offer is not an admission of bad faith should be included.

Proving that cyclists have duties in St. Tammany Parish, Kathleen Simon capped off a four day jury trial with defense judgment for State Farm and its insured. The jury found no liability on evidence that the plaintiff cyclist failed to yield. More details to follow in coming updates.

Firm partner Jim Nieset successfully defended a homeowner against premises liability for a fall resulting in alleged lumbar disc injury. The trial judge granted Nieset’s motion for summary judgment on an “open and obvious” defense under Louisiana Civil Code 2317.1. Louisiana’s Fifth Circuit intermediate appellate court recently affirmed dismissal of plaintiff’s suit.

The plaintiff, an electrician, was hired to perform electrical repairs to the breaker box at the defendants’ house. The defendant placed a fiberglass barge cover on the ground near the breaker box to allow level access to the box and an adjacent shed. After several hours of working on the breaker box, and several near-falls on the barge cover, the plaintiff slipped and fell, injuring his back. The electrician claimed that a bulging disc disabled him from employment. He sued the insureds and their homeowner’s insurer, ANPAC, claiming negligence and strict liability. Trial judge Ross LaDart granted defendants’ motion for summary judgment. Plaintiff’s deposition testimony proved that the barge cover was obvious, he had been working on it for several hours before he fell, that he knew it was wet and that he placed sand on it for traction. The trial court and court of appeal held that a plaintiff has a duty to see that which he should see and that a defendant has no duty to warn against an open and obvious hazard.

This successful defense highlights a point about Louisiana’s tort liability statutes. Plaintiff attorneys frequently refer to “strict” premises liability in an apparent effort to imply that an insurer’s position is indefensible. In reality, the controlling statute provides more meaningful opportunity for an innocent property owner to defeat a claim than is generally encountered in auto cases. The plaintiff must prove a “ruin, vice or defect” with the property about which the owner “knew or should have known.” And, as in this case, the courts recognize an open and obvious hazard affirmative defense.

Ruschel v. St. Amant, 11-78 (La.App. 5 Cir. 5/24/2011).
See, Louisiana Civil Code article 2317.1.

Jim Nieset

The Louisiana Supreme Court ruled in favor of Farm Bureau on effectiveness of non-renewal. Resolving a split between intermediate appellate court, the supreme court held that insurers are required to prove only that notice of nonrenewal was timely mailed to the mailing address on the policy.

Plaintiff prevailed at the trial level (Natchitoches Parish) and the Third Circuit Court of Appeal. A jury found that Farm Bureau had mailed the notice, but that the post-office failed to deliver. The trial court entered judgment in plaintiff’s favor. The Third Circuit affirmed (Johnson v. Louisiana Farm Bureau, 10-979 (La.App. 3 Cir. 2/2/2011)).

Counter to this opinion, the Fourth Circuit previously held that proof of mailing alone was sufficient. Collins v. State Farm, 2010-0769 (La.App. 4 Cir. 1/26/2011). Governing legislation is Louisiana Revised Statute 22:1335 (previously numbered 22:636.6). That statute requires that notice of nonrenewal be “mailed or delivered to the named insured, at the address shown in the policy ….” The supreme court concluded that the statutory language is clear and that only mailing is required.

Johnson v. Louisiana Farm Bureau, 11-0476 (La. 5/6/2011).

The amount of a paintiff’s settlement for one accident may not be used by defendant as evidence at trial for a different accident. The Third Circuit reversed a trial court ruling to the contrary based on the language of Code of Evidence article 413. Defendants successfully argued at trial that the case of Alexander v. Tate, 09-844 (La.App. 3 Cir. 2/3/2010), #0 So3d. 1122 dictated otherwise. The Third Circuit (Thibodeaux, Cooks, Pickett) declined to follow Alexander (Decuir, Peters, Chatelain) on “the facts in this case.” (Emphasis in original.)

Deville was injured in one accident in January 2007 and another in June 2008. The first caused lumbar inuries that were treated with epidural steroid injections. Surgery remained a possibility up to the time of the second accident. The June accident aggravated the lumbar injury and caused a new shoulder complaint. Lumbar surgery was performed in June 2009. Deville settled a claim from the first accident for $450,000.00. At trial on the second accident, the jury was presented with that information. The jury returned a zero verdict.

On appeal, the Court held that Code of Evidence article 413 forbids introduction of the settlement amount under these facts. The question is not to be subjected to a balancing test under Code of Evidence article 403 regarding “probative value” versus prejudice.

Finding the record complete, the Third Circuit went on to award general damages of $100,000.00 (aggravation of lumbar complaints leading to surgery and shoulder injury) and awarded 50% of total medical expenses following the second accident.

Deville v. Frey, 10-1290 (La.App. 3 Cir. 5/4/2011).

Update: The “fact” most clearly distinguishing Deville from Alexander is that Mr. Alexander wanted to introduce the prior settlement for plaintiff advantage. Why did the Deville panel chose to limit their decision to “the facts” when it did not have to do so? The Deville holding is more faithful to the statutory language. The Alexander panel did not describe its reasons for applying a balancing test where statutory prohibition on use of settlement evidence is unequivocal. Non-legislative commentary on the prohibtion suggests intent is to protect plaintiffs, but the statute does not admit as much.

Porteous, Hainkel & Johnson partner Nick Gristina successfully defended a personal injury lawsuit arising out of an altercation between his female client and her former boyfriend. The plaintiff’s initial demand was over $200,000.

After a two day jury trial in the 24th JDC before Judge Liljeberg, the jury deliberated for 33 minutes before returning a verdict in favor of the defense. Initially the jury returned a verdict that Jeanie Clark caused the plaintiff’s injuries but that her actions were justified self defense. A poll revealed that less than 9 jurors found that plaintiff met his burden on causation. Apparently they skipped ahead to question 2 on self defense because they had at least 9 votes on that issue. After being informed that they could not move on to question 2 without 9 votes on question 1 the jury returned to deliberate. The causation question was clarified that plaintiff had to prove by a preponderance of the evidence that Ms. Clark caused the injuries alleged in the petition. After a few minutes the jury returned with an 11 to 1 vote that Plaintiff had not met this burden.

In this case discovery revealed that the plaintiff initially reported that a fall off of a ladder caused his injuries. He also reported the fall from a ladder in two separate applications for Social Security Benefits. It was also discovered that he had a history of substance abuse, denied in his deposition, which was not reported to medical providers. The plaintiff had a history of domestic violence in which he battered Ms. Clark and damaged her property. Pre-trial motions in limine were granted in Ms. Clark’s favor concerning the admissibility of threatening text messages and phone calls as well as testimony of past abuse, based on the domestic violence exception to LSA-C.E. art. 404.

Nick Gristina

This has nothing to do with Louisiana insurance law. It’s much better than that:
North American Map of Regional English Dialects

Here’s what amounts to near parody of a Cajun accent: Lennis Guillot.
And this is an interesting survey of New Orleans neighborhoods by speech pattern: New Orleans

The Louisiana Supreme Court recently confirmed an insurer’s limited right to prohibit post-loss assignment. On certified question from the United States Fifth Circuit Court of Appeals, the Court answered that an insurance policy non-assigment clause may validly restrict assignment if the provision clearly states that it applies post-loss. In re Katrina Canal Breaches – Insurance Assignment

The Louisiana Fifth Circuit recently affirmed dismissal of a plaintiff personal injury claim on Exception of Res Judicata. In the matter of McKinnis v. Reine, the evidence established that plaintiff accepted settlement payment and executed a release prior to filing suit. The result in favor of Reine and her insurer, Louisiana Farm Bureau, represented by PHJ attorneys Jim Thompson and Matt Mann, was opposed with testimony that McKinnis could not read, did not accept or cash a settlement check and did not sign the release. Farm Bureau’s adjuster testified to the contrary. After hearing, Farm Bureau supplemented the record with an affidavit from a disinterested third party declaring that plaintiff cashed the check at the store where she worked.

James S. Thompson

Matthew L. Mann

After May 31, 2011, Louisiana State Police traffic accident reports will be available only through online purchase. Reports will no longer be available for purchase through the mail or in person.

Go to LSP Statewide Crash Reports to search the online database and purchase reports for immediate download in pdf format.

A declarations page and attached “policy disclosure summary” is not proof sufficient to satisfy plaintiff’s burden as to insurance coverage. The Louisiana Third Circuit Court of Appeal reversed trial Judge Mark Jeansonne of Avoyelles Parish on a $225,000.00 default judgment award on a tort claim.

The finding itself is not terribly surprising, but the circumstance is worth consideration. Default judgments are frequently awarded on less than adequate proof. Whether judges conclude that a defendant unwilling to appear for defense is not entitled to the court’s protection or something more nefarious is at work, a remarkably high percent of default judgments are procedurally or legally defective. Upon receipt of default judgment, even if apparently final, a diligent review of the record may reveal means of reversal.

UPDATE: To read the Defense Reasearch Institute (DRI) article click here.

The Louisiana Supreme Court unanimously denied plaintiff’s writ application seeking to overturn a summary judgment in favor of PH&J’s client in an automobile/bicycle collision. We first noted this case HERE.

In discussion of Stenson v. City of Oberlin,2010-0826 (La. 3/15/11) (see post immediately below), we recognized a narrow opening to escape one year prescription for plaintiffs able to intervene in an existing lawsuit. Well, here is the case: Delmore v. Hebert, 99-2061 (La.App. 1 Cir. 9/22/00) 768 So.2d 251. Rather than trying to be cute with a relation back argument on an amending petition, if Tammy Christy had intervened in Jacqueline Delmore’s lawsuit, her claim would have survived a prescription challenge under the Stenson analysis. Here’s why:

• Date of loss = January 3, 1998
• Delmore suit filed November 17, 1998 (not prescribed)
• Defendants file answer on December 21, 1998
• Christy claim filed on January 26, 1999

The Christy claim, had it been an intervention, would have been filed less than 90 days after service of the main demand.  Under Louisiana Code of Civil Procedure article 1067, it would have been timely. Instead, plaintiffs filed an amended petition and argued that the filing date of Christy’s claim related back to November 17, 1998. The First Circuit properly rejected that argument under Giroir versus South Louisiana Medical Center, 475 So.2d 1040 (La. 1985).

The Louisiana Supreme Court makes clear that prescription for intervening lawsuits is controlled by the 90 day rule applicable to incidental demands under La. C.Civ.Proc. art. 1067. Stenson v. City of Oberlin,2010-0826 (La. 3/15/11).
A practice occasionally employed by persons seeking to bring a claim after prescription is to intervene in another timely filed lawsuit arising out of the same event. A classic example: vehicle passenger bringing a personal injury claim more than one year after an accident by intervening in another lawsuit filed by her host driver.

Under the court’s ruling, an intervention filed after the prescriptive date may be allowed to proceed, but only if it is filed within 90 days of the original lawsuit. In our hypothetical, more than one year after her accident, the guest passenger may intervene in her host driver’s suit if she does so within 90 days of the host filing. Outside of that 90 day window, some intervening plaintiffs have tried to argue their claims “relate back” to the date the original lawsuit was filed as provided under La. C.Civ.Proc. art. 1153. Louisiana’s appellate courts conflicted over the correct approach. This ruling makes clear that the 90 day rule applies.

The “relation back doctrine” now clearly applies only to amended petitions – the issue being whether a claim first asserted in an amended petition filed after the prescription date will be considered as timely filed based on the filing date of the original petition. Some courts had used the doctrine to allow interventions to survive a prescription exception where they would not under the 90 day test (our guest passenger intervening in her host drivers suit two years after the accident, for example).

Although this simplifies the rule, it also confirms a limited extension of prescriptive periods. Now, there is no doubt that the window of opportunity to file a lawsuit remains open until the latter of (i) prescription, or (ii) 90 days after the timely filing of a lawsuit arising out of the same occurrence by another plaintiff. Previously, defendants had sometimes successfully argued that an intervening plaintiff’s suit was prescribed even if fled within 90 days of the main demand because it did not pass the “relation back” test. That argument is no longer tenable.

Refusing to break from a long line of cases, the Louisiana First Circuit Court of Appeal agreed that an ex-wife is not a relative beneficiary under the Death on the High Seas Act.  Defendants, represented by Porteous, Hainkel & Johnson partner Ryan Acomb,  were dismissed at the trial court on grounds that plaintiff did not have a cause of action.   The appellate court modified the ruling only by converting the dismissal from without to with prejudice.

No case was cited for the proposition that a former spouse is a relative under the DOHSA.  The First Circuit agreed that the plaintiff was a “dependent,” another necessary element to recovery,  based on her receipt of $125,000.00 per year spousal support.  The court would not recognize her as a relative in spite of argument that she was by “affinity” through a daughter.  Affinity is an alternative to consanguinity by  which non-blood relations, such as step-children, have been recognized as DOHSA beneficiaries. In an opinion not to be published in the law reports,the First Circuit rejected the argument, noting that a line of cases previously rejected claims that ex-spouses were entitled to benefits under the act.

DOHSA-Skinner

Ryan Acomb

Three Brennan restaurants will not recoup lost sales from their insurer says the United States Fifth Circuit Court of Appeals. The restaurants made a business interruption claim against Lexington Insurance Company after New Orleans and State authorities issued mandatory evacuation orders as Hurricane Gustav approached the Gulf coast in August 2008. The storm landed September 1, but did little physical damage to New Orleans and its suburbs.

Lexington’s policy covered “actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises due to direct physical loss of or damage to property, other than at the described premises, caused by or resulting from any Covered Cause of Loss.”

When the evacuation order was issued, Gustav had caused no damage to the continental United States. Brennan attorneys argued that damage in the Caribbean satisfied coverage conditions. The Fifth Circuit disagreed in what a local publication hysterically calls a “narrow view of business interruption coverage.” A more apropos description might be that the Fifth Circuit applied Louisiana law.

More discussion and analysis will be provided in updates coming shortly.

A link to the opinion may be found here: Dickie Brennan Company Inc, et al. v. Lexington Ins. Co.

Ryan Acomb recently defended a trial court victory at the US Fifth Circuit which affirmed summary judgment on Jones Act negligence and maintenance and cure claims. The appellate panel comprised of Weiner, Prado and Owen agreed that summary judgment in favor of Porteous, Hainkel & Johnson client L&M Botruc Rental, Inc. was appropriate. Plaintiff failed to show that he would be able to put on evidence satisfying his “light” (negligence) and “feather light” (maintenance and cure) burden of proof at trial.

Salis v. L&M Botruc Rental, Inc. (U.S. 5th Cir. 11/3/10)

In a decision more prominent for its bad faith elements [see post immediately below], the Supreme Court held that evidence of flood payments to plaintiffs is relevant and admissible at trial on a homeowner’s policy wind damage claim.

The Court agreed that the plaintiffs were entitled to recover full damages, subject to insurance deductibles and policy limits, up to the replacement cost of their home.

Plaintiff offered evidence that rebuilding would cost more than the combined recoverable structure coverage amounts of the flood and homeowners policies. Plaintiff’s replacement cost evidence totaled $434,800.00. Flood structure payments totaled $198,900.00. Subtracting flood and homeowners structure payments from plaintiffs replacement cost left $235,900 uncompensated damages. The remaining limits under the homeowners policy was $229,000.00. Thus, plaintiffs argued, flood payments were irrelevant in deciding whether they could recover for wind damage up to the limits of the homeowners policy.

Rejecting their argument, the Supreme Court observed that Lafayette Insurance Company offered evidence that rebuilding costs ranged between $282,000.00 and $304,000.00. The jury could conclude that total damages were less than the combined limits of both policies. Under that scenario, plaintiffs would not be entitled to recover limits under both policies and the jury is entitled to consider the amount of flood payments.

Wegener v. Lafayette Ins. Co.

Louisiana’s Supreme Court handed insureds another bad faith victory in Wegener v. Lafayette Ins. Co., 2010-810 (La. 3/15/2011). General damage awards under Revised Statute 22:1973 (formerly 22:1220) are not conditioned upon proof satisfying the Civil Code article 1998 intent to “aggrieve the plaintiff” standard. The Court held that general damages may be awarded to insureds where incurred as a result of an insurer’s breach of statutory duty. Civil Code article 1998 limits general damage awards for “breach of contract”, but the Supreme Court rejected Lafayette Insurance Company’s suggestion that the limitation be read into Revised Statute 22:1973.

The prior Supreme Court decision on a parallel question posed in Sher v. Lafayette Ins. Co.,2007-2441 (La. 4/8/08), 988 So.2d 186, is not affected. In that case, the plaintiff’s general damage claim was asserted pursuant to Civil Code article 1998. Wegener explicitly overruled an intermediate appellate court decision [Veade v. Louisiana Citizens Property Corp., 2008-0251 (La.App. 4 Cir. 6/4/08), 985 So.32d 1275] imposing Civil Code article 1998 limitations on Revised Statute 22:1973 general damage awards.

In an unrelated procedural point of order, the Supreme Court employed a “‘plain and fundamental’ error” exception to the usual “contemporaneous objection” requirement for issues raised on appeal to consider a defect not subject to assignment of error. [See footnotes 10 and 11 to the opinion]. At trial, the jury returned a verdict without bad faith penalties under 22:1220. On JNOV motion, the trial court awarded penalties. Lafayette argued that the trial court erred by granting plaintiff’s motion on the premise that penalties are discretionary. The Supreme Court agreed with Lafayette on the discretionary nature of penalties, but remanded for new trial because of jury interrogatory errors sufficient to vacate the original defense verdict. It did so even though plaintiffs never objected to the interrogatories. One can only speculate whether such indulgence would have been afforded a direct challenge at the Supreme Court to the previously unopposed interrogatories.

Wegner v. Lafayette Ins. Co.

See also, Sher v. Lafayette Ins. Co.

Louisiana Code of Civil Procedure article 596 suspends contractual time limits for putative members of timely filed class action lawsuits. So says Justice Bernette Johnson, writing for a 5-2 majority of the Louisiana Supreme Court in an opinion handed down March 15, 2011. Suit filed by plaintiffs on June 27, 2008 for first-party property damage insurance compensation arising out of August 29, 2005 hurricane damage was not time barred notwithstanding contractual limitation expiring on September 4, 2007.

Resolving the keyy issue, the Court held that Louisiana Code of Civil Procedure article 596 suspended expiration of a contractual time limit on filing claims. Arguments offered to the contrary by the insurer, Louisiana Citizens Property Insruance Corporation, included: (1) Interruption and suspension of prescription does not operate with respect to contractual limitations periods (adopted by Justice Victory in dissent); (2) that the contractual period is peremptive and, thus, not subject to interruption or suspension; and (3) that the legislature created a peremptive limitation by passge of acts extending the time to file Katrina claims until September 1, 2007 “unless a greater time period to file such claim is provided by law or contract.”

More on this important decision later. The opinion may be accessed at the link below.

Taranto v. Louisiana Citizens

Did the US Fifth Circuit do damage to the Louisiana Supreme Court’s holding in Louisiana Bag Co., Inc. v. Audubon Indemnity Co., 08-0453 (La. 12/2/2008), 999 So.2d 1104?  By their recent rejection of bad faith claims in SEACOR Holdings, Inc. v. Commonwealth Ins. Co., No. 10-30020, the US Fifth Circuit repudiated some expectations by finding that Commonwealth tendered contract payments based on an erroneous, but not arbitrary , capricious or without probably cause, interpretation of their insurance policy deductible and limit of liability provisions.

Without getting terribly far into the weeds, suffice it to say that SEACOR’s Commonwealth policy contained three relevant deductibles: “Windstorm”; “Named Windstorm”: and “Flood.”  Commonwealth paid SEACOR’s claim based on a cumulative application of the Named Windstorm and Flood deductibles and subject to lower flood limits of liability.  The Fifth Circuit rejected both applications, finding that only the Named Windstorm deductible applied and that the Named Windstorm coverage was the proper limit of liability.  In so doing, the Fifth Circuit went against a popular understanding of Louisiana Bag that any misreading by an insurer of its policy resulting in improperly reduced payments to an insured is conclusively bad faith.  SEACOR made the argument explicit with citation to the Louisiana Supreme Court’s (limited?) admonition that an “insurer bears the risk of interpreting its own policy and will be liable for penalties for its errors.”  Louisiana Bag at 1117.

Writing for the Fifth Circuit panel, Judge Higginbotham observed with doctrinal accuracy that Louisiana does not follow stare decisis – the common law concept of strict adherence to jurisprudential precedent.  He further notes that the “Supreme Court’s guidance on insurer penalties has been less than uniform” and quotes dicta from Louisiana Bag that “when there are substantial, reasonable and legitimate questions as to the extent of an insurer’s liability or an insured’s loss, failure to pay within the statutory time period is not arbitrary, capricious or without probable cause.”  Louisiana Bag at 1114.

As insurance advocates, we are not comfortable with a categorical rule of bad faith and, therefore, welcome the philosophy of SEACOR. Under contract interpretation rules favoring insureds, there must be some allowance for insurer error as to how broadly the rules may apply coverage on a particular claim.  Perhaps a presumption consistent with the general rules of contract interpretation would be appropriate.  The question then would boil down to whether the insurer’s reading of its policy was reasonable even if it turns out not to be a favored reading under governing interpretive principles.  Whether SEACOR was  such a case is fair game for debate.  It seems reasonably clear that Louisiana Bag was not.  SEACOR was, at a minimum, an actual dispute over contract interpretation.  The same may reasonably be denied of Louisiana Bag.

SEACOR Holdings, Inc. v. Commonwealth Ins. Co.

Extra-contractual claims premised on alleged insurer bad faith has been a recurring topic of late. Not that the issue had been dormant, but it seems that lately there have been several illustrative examples to consider. Louisiana’s insurance code contains two relevant statutes: Louisiana Revised Statutes 22:1893 and 22:1972. Know them. Know them well. Compliance is as sure a defense as non-compliance is a hazard. The attached petition illustrates the peril of ever assuming matters are resolved prior to having a release in hand.

Robique excess petition

The allegations are simple. Plaintiff made a settlement demand for policy limits conditioned on receipt of an affidavit of no other insurance. The defendat’s inusrer timely agreed to pay policy limits, but failed to address the affidavit condition. Suit was filed two months later.  After the case went to trial and an excess judgment obtained, plaintiff’s counsel took an assignment and now is suing America First Insurance Company on a bad faith failure to settle claim.

Any client interested in learning more about the current state of Louisiana’s insurance bad faith law should call your Porteous, Hainkel & Johnson contact or Jim Nieset or Eric Johnson for details on our seminar style presentations.

Lightfoot v Hartford

A Jefferson Parish jury – 24th Judicial Distrcit Court – returned a defense verdict on a claim against an insurance agent in a case defended by James R. Nieset, Jr. of the firm’s New Orleans office. The jury found that the plaintiffs failed to prove allegations that plaintiffs repeatedly asked their agent to increase flood coverage policy limits to match the mortgage balance.

Plaintiffs were a young married couple whose home was damaged by Hurricane Katrina. Plaintiffs claimed they telephoned their agent with instructions to increase flood limits after receiving letters from mortgage lenders requesting proof of coverage.

Jim Nieset

Chauntis Jenkins, a partner in the firm’s New Orleans office began 2011 successfully defending a jury trial in New Orleans’ Civil District Court – 80% comparative fault on the plaintiff under Louisiana’s pure comparative fault system. She followed that up with news of her selection as a Southern University Law Center Distiguished Alumni recipient for 2011.

Even insurance lawyers are asked by the non-lawyer population (usually friends and family members) questions touching on divorce, criminal law and corporations/business entities. On a good day, we’ll offer enough useful information to help point a hapless interrogator in the right direction. For example, if you seek advice on whether your superhero friends should incorporate, the following discussions may helpfully guide where others might only guess:

Should the Justice League of America Incorporate? Or become an LLC?

The Louisiana Supreme Court recently invalidated business use exclusions in personal automobile liability polices as they apply to operation by a non-owner/named insured employee of a business to which the exclusion was meant to apply. Sensebe v. Canal Indemnity Co.,2010-C-0703 (La. 01/28/11). The Mississippi Farm Bureau policy excluded liability coverage of the listed vehicle while operated by an employee of an “automobile business.” The Court held that the exclusion violates mandatory omnibus coverage codified at Louisiana Revised State 32:900(B)(2).

Farm Bureau, which was represented by PH&J, distinguished currently existing law invalidating other “business use” exclusions attempting to deny coverage to a named insured.  Marcus v. Hanover, Ins. Co., 1998-2040 (La. 6/4/99), 740 So.2d 603.

With this ruling, it appears that now all “business use” type exclusions, at least as they apply to personal automobile liability policies, are invalid under Louisiana law.

Sensebe v Canal

Marcus v. Hanover

A hiatus pending Louisiana State Bar Association approval of the firm website, including blog, interrupted posting of new events. With approval in hand and a launch pending, bogging will recommence.

Third Circuit Judges Thibodeaux, Decuir and Genovese reversed a trial court judgment which  awarded only a percentage of total damages to a chemical exposure plaintiff on ground that surgery reflected the acceleration of an already existing future need for treatment.

In Arabie v. Citgo, 10-334 (La.App. 3 Cir. 10/27/10), the appellate court concluded that the plaintiff should recover full damages on an egg shell theory.  The written opinion does not offer details on the medical likelihood or likely timing of surgery had the exposure not occurred.  Further, their comparison to another ruling involving back surgery, Abshire v. Wilkinson, 787 So.2d 1158, is confused by inconsistent descriptions of the medical evidence in that case.  In the same paragraph, the Arabie opinion states that Abshire “would eventually have undergone the surgery” and “may have required surgery at some point in the future.”  This, of course, begs the question of whether future surgery was a foregone conclusion for Abshire or not.

Regardless, the trial judge in Arabie is reported to have made a factual determination that exposure “accelerated the need for what would have been a necessary surgery.”  The appellate opinion offers no contrary view of the evidence. Thus, the logical inference is that the Third Circuit does not allow an established future need for surgery even absent the tortious conduct to mitigate a defendant’s liability for the full cost of an accelerated procedure and for all associated general damages.

This is a difficult result for defendants.  The ruling seems to draw a bright line standard by which there is no logical reason why a different outcome should prevail even if the surgery is accelerated by only a year, or, for that matter, a single day.  It would be one thing if the Third Circuit found that only a small reduction should be applied, say 10%, because the surgery was accelerated by several years – say, a decade or more.  It is quite another to conclude that no reduction is appropriate; suggesting that the fact of acceleration is dispositive while the extent of acceleration has no place in their analysis whatsoever.

Arabie v. Citgo Petroleum Co.

As noted below, the La. Fifth Circuit Court of Appeal rescued Louisiana Citizens Property Insurance from crippling penalties awarded by the trial court on motions for summary judgment in Jefferson Parish. Judge Henry G. Sullivan, Jr. granted a series of summary judgments in favor of class action plaintiffs totaling more than $92,000,000.00 in penalties for failure to timely initiate loss adjustment pursuant to La. R.S. 22:1892 (formerly 22:658) and La. R.S. 22:1972 (formerly 22:1220). Judgment was based on documentary evidence consisting of spreadsheets suggesting that Citizens’ loss adjustment in each of the class claims was not initiated within the statutorily mandated period. The Fifth Circuit held that penalties are not mandatory and that whether and to what extent penalties should be awarded in individual cases was a question of fact for trial.

The appellate court rejected arguments that La. R.S. 22:1892 is unconstitutional. In essence, the court’s means of rejecting the constitutional argument may have ordained the ultimate result. Citizens’ argument centered on a contention that the summary procedure amounted to a denial of due process insofar as the statute penalizes without individualized consideration. The Court saved the statute from an interpretation that would be violative of due process requirements by holding that a reasonable interpretation included a condition of enforcement to be that each claim be considered on its individual merits.

A further wrinkle was the Fifth Circuit holding that the penalty provision of La. R.S. 22:1972 assessing damages at the greater of $5,000.00 or twice consequential damages incurred establishes a statutory maximum, not minimum. Plaintiffs argued that summary judgment was appropriate because the trial court had awarded the minimum amount that could possibly have been decreed based on individualized consideration of each claim.

See update to the post immediately below for a link to the Fifth Circuit opinion.

The Louisiana Supreme Court recently handed down a win for a UM insurer on a bad faith claim. The Court reinstated a jury verdict denying bad faith penalties and attorney fees after the trial court granted JNOV on the issue and the Third Circuit Court of Appeal affirmed.

Recognizing that “a plaintiff seeking penalties and attorney fees must prove the insurer knowingly committed actions which were completely unjustified, without reasonable or probably cause or excuse” the Court responded that the jury could reasonably have concluded that the insurer had a legitimate dispute as to causation. The Court explained that “bad faith should not be inferred from an insurer’s failure to make a timely tender when there is a reasonable and legitimate question as to the extent and causation of a claim.”

The Supreme Court opinion is additionally favorable to the insurer by reversing a Third Circuit award of additional damages, including future medicals, that had been rejected by the trial court on JNOV.

The case should not be read as a blanket endorsement of the insurer’s handling of the particular claim. The adjuster, after receiving notice of recommended surgery, refused to make a tender and did not follow up with the treating physician based on the belief that a motor vehicle accident subsequent to the one at issue in this case may have caused planitiff’s surgical condition. Had the jury awarded bad faith penalties and attorney fees, it is likely the Supreme Court would have affirmed that decision as well.

A copy of the written opinion is available at the following link:

Lastrapes v. Progressive

UPDATE

More on the following case later, but while we’re on the subject of bad faith, you may want to review the recent Louisiana Fifth Circuit Court of Appeal decision in Oubre v. Citizens upholding the constitutionality of Louisiana’s bad faith penalty statutes, but reversing a trial court class action summary judgment in excess of $92 million for bad faith penalties on ground that individual determination of the appropriate penalty is necessary for each class member.
Oubre v. Citizens

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Following jury trial, an interview with the jurors is helpful to understand what evidence mattered and what evidence did not in deliberations. Often the answers are surprising.

It is not common for a juror to write at length on her impressions. Attached is an email received by defense counsel with another firm describing deliberations following an Orleans Parish Civil District Court trial. How her experience translates to other venues is debatable. CDC is a notoriously liberal jurisdiction and is one of only a few inner city district courts in the state. Nonetheless, her comments are eye opening in part, somewhat disheartening too, and illustrate problems that can arise in any court.

CDC Juror email

Everyone involved in making decisions regarding trying a case, particularly whether to try it to a jury, and presentation of evidence would be well advised to recall these comments from jury selection through closing argument.

Deviating briefly from our usual focus on Louisiana, the following news item from Connecticut merits a link. A driver convicted of manslaughter in the death of a 14 year old bicyclist has countersued – a reconventional demand is what we call it in Louisiana – the dead boy’s parents for emotional distress arising out of their negligence in allowing him to ride without a helmet. The driver was travelling 83 miles per hour in a 45 mph zone at impact.

Driver Convicted in Teen’s Death Sues Victim’s Parents

A group of five attorneys filed suit in connection with their November 10, 2010 separation from the Gauthier, Houghtaling & Williams plaintiff firm.  The firm, established by famous trial attorney, Wendell Gauthier, now deceased, maintains an active plaintiff personal injury practice in Metairie, Louisiana. Mr. Gauthier is probably best known for his role in the 1990s tobacco litigation. Departing attorneys include Stephen Huber, Todd Slack, Brian Houghtaling, Rajan Pandit and Charles Thomas. The suit, filed in Jefferson Parish, seeks declaratory judgment on issues related to compensation and fiduciary obligations of the attorneys to the firm.

Houghtaling suit

In very few instances does Louisiana law impose strict liability. The concept is often mistakenly applied to various claims. The error stems from a belief that damage claims requiring no proof of negligence are strict liability actions. More accurately, they are special causes of action for which the requisite elements are different, by statutory definition, from the usual tort claims asserted pursuant to Louisiana’s general negligence action under Civil Code article 2315. Classic examples are claims against pet and property owners.

Kathleen Simon, in the PH&J Covington office recently proved that dog torts can be defended. In her cheekily named “who let the dogs out” case, Kathleen’s victory established that when the answer is the plaintiff, the result may be a defense verdict.

Kathleen Simon, who demonstrated with
trademark flair that when it’s the plaintiff
who let the dogs out, the dogs’ owner
may be free from liability.

Premises liability claims are also errantly described as strict liability causes of action. They are not. Civil Code article 2322 provides the operative language. It states:

The owner of a building is answerable for the damage occasioned by its ruin, when this is caused by neglect to repair it, or when it is the result of a vice or defect in its original construction. However, he is answerable for damages only upon a showing that he knew or, in the exercise of reasonable care, should have known of the vice or defect which caused the damage, that the damage could have been prevented by the exercise of reasonable care, and that he failed to exercise such reasonable care. Nothing in this Article shall preclude the court from the application of the doctrine of res ipsa loquitur in an appropriate case.

It is true that a property owner does not need to be proven negligent for the existence of a “vice or defect” to be held liable for injury caused by that “ruin.” It is not true, however, that the property owner is liable by virtue of the mere fact of an injury. The owner must be shown to have knowledge, or to have been unreasonably ignorant, of the injury causing condition. Moreover, plaintiff must prove that the owner failed to effectively act upon the knowledge. Obviously, the unreasonably ignorant might have a more difficult time arguing that they could not have prevented injury from ruin they chose to ignore.

A final, but vital, point – it is often an appropriate affirmative defense that the ruin or risk of harm was open and obvious. In any case where the theory of liability is premised on one of these statutes, investigating claims representatives should keep an eye out for details that might be useful to defense counsel in the event of assignment. For example, if an injured patron of a business claims the existence of a long-standing condition on the premises is a ruinous vice causing injury, the claimant’s history and practices visiting that location may give rise to an open and obvious affirmative defense.

Many smart, and some not-so-smart, plaintiff attorneys attempt to bully their way to recovery by throwing around the phrase “strict liability.” In Louisiana, don’t be fooled by what you know about that term from other jurisdictions.

The attached Louisiana First Circuit opinion merits serious consideration for adjusters and lawyers.  There are several lessons for claim handling.

First, failure to make a UM tender of undisputed amounts within thirty days of receipt of adequate proof of loss is bad faith “per se.”  The court allowed for no confusion or misunderstanding.  If it is owed, pay it within thirty days, even if negotiations or discussions appear to be ongoing as to a portion of the total amount.  Do not assume that plaintiff counsel’s apparent silent acquiescence to delay allows for more time.  If you think there is a tacit agreement to hold off on payment, confirm in writing.

Second, an enforceable lien may make a portion of the amount due “disputed” if there is active negotiations regarding the lien, but the balance is not.  Once the amount of the lien is determined , it too becomes undisputed.  To be safe, a check for the undisputed portion should be tendered within thirty days without fail.  A separate check for any portion known to be subject to an enforceable lien should be tendered, payble to both claimant and lienholder, unless there is a written agreement from plaintiff counsel for a different arrangement.

Third, know the difference between an enforceable statutory right or lien and a potential subrogation interest.  A health insurer, for example, may have a potential subrogation claim that is not enforceable against a liability or UM insurer unless a lawsuit or intervention in a pending lawsuit is filed.  A liability/UM insurer may not condition any payment of undisputed amounts on satisfaction of a potential third-party subrogation interest.  Medicare, on the other hand, has a legally enforceable interest against a liability or UM insurer.  Settlement with and release from a Medicare beneficiary does not terminate the federal government’s right of recovery.  Certain other health care providers also have a “perfectable” lien interest that may be enforceable against a liability or UM insurer even after a settlement with the claimant.

Fourth, know what you are dealing with and, if in doubt, confirm in writing with plaintiff counsel.  The plaintiff attorney in this case made no effort to spare GEICO from the consequences of what appears to be an innocent misunderstanding.  Don’t count on the courts to respect your assumptions.

Fifth, to the extent an insurer chooses to acknowledge in advance a payment obligation, the acknowledgment may be interpreted as conclusive proof of loss.  It is not clear from the opinion why GEICO felt it was necessary to send written notice of “intent to settle,” but the First Circuit took that as an admission of a debt owed.

Richardson v. GEICO

The judicial interest rate for 2011 has been fixed at 4.0%.

The most recent prior year rates are 3.75%, 5.5%, 8.5% and 9.5% for 2010, 2009, 2008 and 2007 respectively.

UPDATE: To read the Defense Reasearch Institute (DRI) article click here.

Nick Gristina, a partner in the Porteous, Hainkel & Johnson New Orleans office teamed up with associate Matt Mann to win a difficult summary judgment that has now been affirmed by Louisiana’s Fifth Circuit Court of Appeal. Even with plaintiff disputing the facts, defendants, Farm Bureau and its insured, were dismissed on the strength of eyewitness and police testimony corroborating the insured’s account of his collision with an eight year old cyclist. The cyclist emerged from behind a Suburban stopped at a traffic signal and struck the left front fender of the defendant’s Toyota Tundra as it passed in the opposite lane. Plaintiffs argued that there was a genuine issue of material fact as to the point of impact and credibility of the witness. Judge Alvin Turner (23rd JDC – St. James Parish) granted summary judgment. The Fifth Circuit panel was composed of Rothschild, Dufresne and Johnson. Written reasons of the appellate court are attached:
Michael versus Poche

UPDATE:  Plaintiff has filed a Motion for Rehearing in the 5th Circuit.

Nick Gristina

Matt Mann

Suppose someone uses an implement to pop the lock on his own vehicle. Having achieved his goal, if he then negligently tosses the implement aside causing immediate injury, does that act constitute operation, maintenance or use of the vehicle? In the analysis of Judge Robin Giarusso and a panel of the Fourth Circuit (Armstrong, McKay, Tobias), it does not. Judge Giarusso granted summary judgment in favor of plaintiff and against homeowner’s insurer, Liberty Mutual, finding coverage under the homeowner’s policy. The Fourth Circuit affirmed – opinion attached. Liberty Mutual was also the auto liability insurer, albeit under a policy with far lower limits ($30,000 versus $300,000). Allstate was the plaintiff’s UM insurer.

Baker versus Hurst

Thoughts on the wisdom of sarcasm in trial examination from our friends at the Defense Research Institute

Trial examination strategies – sarcasm as a rhetorical device

Full results from the October 2, 2010 Louisiana judicial elections are now available at Judgepedia:
Judicial Election Results

Analysis of Federal Code of Evidence 702 led the 6th Circuit to reverese a trial court judgment on ground that a neurologist’s “expert” testimony was inadmissible speculation. A dissent criticized the majority for not employing Daubert analysis. An interesting discussion of the case and reasons for judgment can be found at the following link: A ‘Masterly’ Opinion on Expert Testimony

Perhaps the most surprising detail of the attached case is that the First Circuit panel failed to achieve unanimity. Apparently, the point is not too obvious for comment. An insurer may not appoint a single attorney to represent both it and its insured without waiving a known coverage defense. Separate counsel must be retained, one for the insurer and another for the (alleged) insured. Even if coverage is merely in doubt, an insurer should not retain the same counsel to represent its interests and those of the alleged insured.

In addition to waiving his client’s coverage defense, the insurer’s attorney seems to have engaged in conduct inconsistent with ethical obligations. An attorney may not simultaneously represent multiple defendants while acting in the interests of one to the legal prejudice of the other. Even if his representation of the latter is terminated, he still may not conduct defense in that action adverse to the interests of his now former client.

That all of this actually happened and the issue was taken to the court of appeal, suggests that the attached may be necessary reading.

Emery v Progressive

In allowing the lawsuit by 20 states’ attorneys general (Louisiana included) against the individual mandate of the Patient Protection and Affordable Care Act,Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010), Judge Roger Vinson of the United States District Court for the Northern District of Florida, Pensacola Division, observes,

Congress should not be permitted to secure and cast politically difficult votes on controversial legislation by deliberately calling something one thing, after which the defenders of that legislation take an “Alice-in-Wonderland” tack and argue in court that Congress really meant something else entirely, thereby circumventing the safeguard that exists to keep their broad power in check.

An interesting nod toward integrity? The whole opinion may be read here: Order and Memorandum Opinion

Several judicial elections were held on October 2, 2010. The election coincided with a trip I took to Minnesota and since returning I have not had a chance to catch up with all results. I can report that Judge Toni Higginbotham, formerly a family court judge in East Baton Rouge Parish was elected to the First Circuit Court of Appeal. Judge Higginbotham defeated 19th JDC judge Tim Kelley. Judge John Guidry was re-elected to the First Circuit Court of Appeal over challenger Judge Wilson Fields of the 19th JDC.

UPDATE

Full results are now available at Judgepedia
Judicial Election Results

Physicians have their way with terminology used to describe the various intervertebral disk conditions found on CT and MRI. It is, of course not at all unusual to hear the more plaintiff friendly orthopedic surgeons refer to herniations where more conservative orthopedists and radiologists find degenerative disk bulges. Perhaps in the world of litigation the finer semantic distinctions are academic next to the reality of “expert” contrary testimony of a treating physician. Nevertheless, it is never a useless exercise to know and understand with precision what the terms are intended to convey. In furtherance of that effort, we were recently provided the attached literature that does as good a job as any at explaining their meanings.

spine literature

In a surprising decision out of the Louisiana Fifth Circuit Court of Appeal, a three Judge panel held that ownership of a motor vehicle transferred upon agreement of price and delivery. Actual payment and/or transfer of title is not a condition precedent to termination of liability coverage under the seller’s insurance policy.

A pdf copy of the opinion is available at the following link:
Allerton v. Broussard

Louisiana Acts 2010, No, 618 amended various revised statutes to provide specific rules for the operation of motor vehicles around bicycles and bicycle “facilities” (paths). The amended statutes may provide standard of care evidence in vehicle/bicycle collision cases. Act 618 was effective August 15, 2010.

The text of the legislation may be obtained at the following link:
Acts 2010, No. 618

On the way to the office one morning.
Imaging Light

Pondering the parameters of a personal jurisdiction Rule 12 motion on behalf of a client, the oddity occurred to me that none of the many other defense counsel in the particular class action argued that plaintiffs did not have standing to sue defendant insurers. The Federal diversity suit could be brought against my client only pursuant to Florida law governing insurance contracts. Although the suit was filed in Louisiana – hence the jurisdictional issue of my original inquiry, Louisiana’s direct action statute doesn’t give a Florida resident standing to sue a foreign insurer over a policy delivered outside of Louisiana to a Florida insured.

The theory behind the direct action statute is simple. A potential third-party beneficiary of a liability policy does not have privity of contract with the insurer. As a general matter of contract law, lack of privity equals lack of standing to sue on the contract. The direct action statute confers standing legislatively. In Louisiana, a tort plaintiff, someone rear-ended in a motor vehicle accident for example, can sue the rear-ending driver’s liability insurer.

While developing my brief, I ran across the following from the Insurance Journal. In addition to doing a good job of explaining the direct action statute, it illustrates the hazard of assuming that anyone, even a judge, understands these issues.

Anatomy of a misunderstanding

Misunderstandings abound.

The Louisiana legislature recently amended the statute governing costs providers (or their copy services) may charge for medical record duplication. Significant savings can be achieved by requesting copies in digital format (such as on CD/DVD).

The handling fee increased from $15 to $25, but the copy charge per page drops from fifty cents to twenty five cents for pages 351 through 500. Per page charges over 500 remain at twenty five cents. If the records are “generated, stored or maintained in digital format” the provider may not charge more than $100, including postage and handling, for production of any chart in digital format. Thus any record over 150 pages would be cheaper to obtain on disk. In short, unless there is a reason to do otherwise, ask for records saved to disk.

This legislative amendment became effective on August 15, 2010.

A copy of the bill is located at the following link:
Medical Fees – Act 740

The Louisiana Insurance Law Blog is a service of the Porteous, Hainkel & Johnson firm.  With offices in New Orleans, Thibodaux, Covington and Baton Rouge, we are a regional firm dedicated primarily to the defense of claims against insurance companies and their insureds.  The firm has been in existence since 1928.

This blog will provide current information on legal matters pertinent to the insurance and legal communities.  It will supplement the news reported in our firm newsletter of the same name.  The newsletter will be posted on the blog.  To receive an email copy, please contact ejohnson@phjlaw.com for a free subscription.

Gino Forte is an associate in the firm’s Covington office. He joined the firm in 2009 and practices in the areas of personal injury, insurance, business and construction litigation. Mr. Forte was admitted to the Louisiana Bar in October 2004, after graduating from Tulane Law School. He is admitted to practice before the U.S. District Court for the Eastern and Middle Districts of Louisiana. Mr. Forte earned his Bachelor of Science degree from LSU, where he graduated magna cum laude with majors in accounting and finance. He is admitted to practice before all Louisiana State Courts and the U.S. District Courts for the Eastern and Middle Districts of Louisiana